Wealthtech private markets platform Opto unveiled a number of product enhancements, including the addition of a new CIO toolkit. This suite of tools, along with pre-trade analysis capabilities and the ability to create custom white-label funds, strengthens its platform for Chief Investment's clients. The changes in leadership positions announced along with these improvements are intended to create more clarity around key responsibilities as the firm grows, according to Opto co-founder Jake Miller.
Opto's latest product enhancements center aims to help CIOs with investment selection and management. The CIO Toolkit uses Opto's private markets performance data set to allow users to screen proposed investments using performance comparisons with similar assets as well as public markets to run scenarios of stress testing and to control biases. It will also provide them with an AI tool to extract data from relevant documents for analysis and share it with their teams.
CIOs tend to be swamped with investment pitches, and the CIO's toolkit will allow them to narrow the field of potential funding proposals from hundreds or thousands to a few dozen that best fit their criteria, Miller said. . It will also reduce the time they can spend in meetings and making phone calls to discuss these proposals with staff.
In another enhancement, Opto will give investment professionals the ability to perform pre-trade analysis to help make decisions about when to enter or exit investments, what their liquidity will look like, how much cash flow can receive while investing in a fund. and how they can use that cash flow to maintain their clients' desired portfolio allocation to alternatives. These recommendations will be based on Opto's data collected from several hundred thousand funds dating back to the 1980s.
“You can plug (the data) into any existing portfolio or any forward-looking distribution and model 'Given where I am today, what do I need to get to that distribution and what does that mean in terms of of my cash flows, both of which I'm going to put back into my portfolio?'” Miller noted.
In addition, the firm offers custom fund creation and management for clients, allowing them to create a single white label fund from multiple private underlying funds and manage them through the Opto platform. According to Miller, most clients prefer to access the private markets through such custom white-label vehicles because major funds in the space tend to be oversubscribed and have high investment minimums. This also makes it more difficult to create diversified portfolios for clients who do not have tens of millions of dollars to invest. However, he noted that if the custom fund is rolled out to several Opto clients, end investors can participate in the same main funds with much lower minimums.
Custom white-label funds allow RIAs to differentiate themselves from the competition, Miller added. “It's really everything they want to bring to life, but it's something that's not available anywhere else. Their customers can't walk down the street like they used to with some of these really big deals and get the same thing.”
Some of Opto's competitors among alternative investment platforms, including iCapital, CAIS, GLASFunds and Subscribe, also offer white label fund capabilities.
In terms of personnel moves, Miller has assumed the title of chief solutions officer, responsible for growing partnerships with RIAs and integrating institutional quality programs into Opto's platform. Another co-founder of the firm, Matt Reed, is now the firm's chief technology officer. Reed has led Opto's engineering efforts since its founding.
“It's much more about describing how things are actually working versus a significant shift in focus for each of us,” Miller said. “We have grown as a company. We're approaching 75 people, and with that comes a desire to be a little clearer about what we all do here and trying to align it around core functionalities.”
Miller added that the creation of the chief solutions officer role was driven by a desire to elevate solutions as a department.
“As we continue to partner with more advisors, Jake and Matt will be integral to growing Opto's suite of innovative solutions that modernize workflows and simplify advisors' private markets experiences,” said. Opto CEO Ryan VanGorder in a statement.